Minister: Rise in shopping via ecommerce platforms poses major challenge, changes required

The sharp increase in the volume of goods bought by Maldivians via global ecommerce platforms, driving up the US dollars that must be sold to cover these transactions, poses a major challenge to the Maldives, and requires behavioral changes, says Finance Minister Hassan Zareer.

Delivering a presentation at the ruling People’s National Congress (PNC) congress on Wednesday, Zareer highlighted on the increase in cost of imports, which is driving up dollar expenditure.

Zareer said that the increase in global prices due to the Middle East conflict drove up the cost of imports by 28.8 percent during the first seven months of this year – marking an excess of USD 539 million compared to the same period last year.

The biggest increase was seen in fuel imports, which increased by USD 290 million. Meanwhile, construction material rose by USD 83 million, food imports by USD 38 million, and other imports by USD 127 million.

Zareer said that the other imports include dollars sold for ecommerce transactions and travel.

“The day-to-day increase in shopping through ecommerce platforms pose the biggest difficulties,” he said.

Zareer said that the Bank of Maldives (BML) currently sells customers over USD 80 million each month.

He said that the scale was “unsustainable”, given that the volume of dollars going into the country is lower than what’s going out.

“There needs to be some change to our behavior, some change to our import behavior. We need to introduce policies to effect change. We are working on this,” he said.

The BML has also been expressing concern for months regarding having to sell dollars for online shopping beyond what goes into the bank. The bank introduced limits for such transactions on its MVR cards this year.